Centamin flying this morning

Wednesday, 31st July 2019 09:31 - by Rajan Dhall

Gold has been on a pretty decent run of late and Centamin (CEY:LN) have profited from the price rise. Today the company have released their latest interim results for the last 6 months. 

• Revenue increased 19% Y/Y
• EBITDA jumped 15% Y/Y
• The basic EPS fell to 0.54 from 0.97
• Cash cost of production was US$692 per ounce produced
• The interim dividend came in at USD 46.2 million (4.0 USD cents per share)

In the companies outlook section of the report, they say that "Costs to trend downwards in line with the expected increased production in H2" which is encouraging. Andrew Pardey the Co's CEO commented: “Six months into our tenth year of commercial production, Centamin continues to make good progress delivering on its corporate strategy. The Company is a high margin gold producer, delivering reliable stakeholder returns through strong free cash flow generation. He went on to say " in the second half of 2019 we expect to deliver stronger production and increasing free cash flow. Today, Centamin has provided baseline estimates for Sukari’s production and cost guidance through to 2021 on a mining plan that is designed to maximise returns to all of our stakeholders through the delivery of profitable ounces"

Looking at the weekly chart now you can see that the share price bounced some 48% from the lows seen in early 2019 smashing through the 100p mark. Now we are currently at a resistance point which was used as a significant support level in Oct 17. There is also a trendline to contend with and a conclusive break would be a bullish signal especially on good volume. The outlook on gold is dependant on a few variables including the Fed decision later tonight. If it is a one and done scenario (Fed) we can expect a rise in the price of the gold and stocks will suffer. However, the USD strength may be a small issue but moves in the greenback seem overextended. Either way, Centamin are in a good position at the moment and risk sentiment is hanging on a knife-edge so the macro event will have some bearing on this one. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.